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Royal Bank of Scotland yesterday refuted claims that it is "squeezing" money from embattled small businesses, in spite of its pledge to freeze overdraft charges for 12 months.
One Scottish businessman, who is involved in the leisure sector and asked to remain anonymous, has claimed that while Royal Bank has kept its promise not to increase overdraft interest charges, it has at the same time significantly hiked its transaction fees.
The businessman told The Herald: "I've been a business banking customer of Royal Bank of Scotland for many years, and so was my father before me, and I can tell you I'm not very happy about the way I have been treated.
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"I have a normal business overdraft with the bank, and although they have kept their promise on the interest charge - which is particularly good, I was shocked to be quoted an arrangement fee that's gone up from £750 to £2000.
"On the one hand they're making statements to the press and on their website about a commitment not to increase overdraft pricing - but it seems to me that transactions fees are just as much part of overdraft pricing as the lending rate.
"It also seems to me they are giving with one hand and taking away with the other."
A number of other small businesses, many of which have been hit hard by the economic downturn, the decline in demand and the difficulty of getting affordable loans, have contacted The Herald in recent months with complaints about the behaviour of banks and the increasing of borrowing charges.
However, Royal claimed such complaints are unwarranted. It also draws a distinction between lending to small business customers, with a turnover generally up to £1m, and that to larger "commercial" enterprises, to which no overdraft pledge was made.
A spokesman for Royal Bank yesterday insisted the bank had not altered the structure of its transaction fees for 12 months, except in "exceptional cases".
He said: "RBS has committed not to increase overdraft pricing for small businesses, with effect from December 1, 2008. Further, the bank has pledged to continue to provide committed overdrafts to small businesses. The vast majority of RBS's small business lending is base rate linked so our customers benefit immediately from any cut in interest rates, as they have done twice in the last two months."
The spokesman added: "Our policy on customer fees has not changed as a result of this commitment and therefore we will not be changing our fee structure to recover this cost."
Source: Royal Bank Rejects Claims Of Squeezing Small Businesses (from The Herald )</title>
One Scottish businessman, who is involved in the leisure sector and asked to remain anonymous, has claimed that while Royal Bank has kept its promise not to increase overdraft interest charges, it has at the same time significantly hiked its transaction fees.
The businessman told The Herald: "I've been a business banking customer of Royal Bank of Scotland for many years, and so was my father before me, and I can tell you I'm not very happy about the way I have been treated.
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"I have a normal business overdraft with the bank, and although they have kept their promise on the interest charge - which is particularly good, I was shocked to be quoted an arrangement fee that's gone up from £750 to £2000.
"On the one hand they're making statements to the press and on their website about a commitment not to increase overdraft pricing - but it seems to me that transactions fees are just as much part of overdraft pricing as the lending rate.
"It also seems to me they are giving with one hand and taking away with the other."
A number of other small businesses, many of which have been hit hard by the economic downturn, the decline in demand and the difficulty of getting affordable loans, have contacted The Herald in recent months with complaints about the behaviour of banks and the increasing of borrowing charges.
However, Royal claimed such complaints are unwarranted. It also draws a distinction between lending to small business customers, with a turnover generally up to £1m, and that to larger "commercial" enterprises, to which no overdraft pledge was made.
A spokesman for Royal Bank yesterday insisted the bank had not altered the structure of its transaction fees for 12 months, except in "exceptional cases".
He said: "RBS has committed not to increase overdraft pricing for small businesses, with effect from December 1, 2008. Further, the bank has pledged to continue to provide committed overdrafts to small businesses. The vast majority of RBS's small business lending is base rate linked so our customers benefit immediately from any cut in interest rates, as they have done twice in the last two months."
The spokesman added: "Our policy on customer fees has not changed as a result of this commitment and therefore we will not be changing our fee structure to recover this cost."
Source: Royal Bank Rejects Claims Of Squeezing Small Businesses (from The Herald )</title>
